I’ve written before about how I’m a big believer in cash for miscellaneous daily expenses. Cash purchases are inconvenient — after every purchase I’m forced to deal with the change. It’s annoying, and I often skip buying small, unnecessary things like drinks and snacks because they’re not worth the extra effort.
A lot of other people use this technique too. Quite a few have told me they switched to a hybrid cash budget and it cut down on unnecessary spending.
This tactic isn’t perfect, though. It seems oddly specific, but I’ve had multiple women tell me they won’t go into a gas station to pay for fuel with cash because it’s safer to pay by card. Until recently, I didn’t have a great solution for that. Then the pandemic hit. Right now, some businesses won’t accept cash — either due to health concerns or the present coin shortage.
Since the pandemic started, I’ve been exploring alternative options to paying cash that still retain most of the budgetary benefits. My favorite is using a reloadable prepaid debit card.
It’s Free (Sort Of)
Bluebird has no monthly fees, no overdraft fees, and if you sign up online even the card itself is free. When used in place of cash and refilled online with another card or by bank transfer, the service is… well, free. The fees by which they make money don’t apply to me and how I use the card. My guess is they’re either selling my personal information to third parties for advertising (i.e. to people like me) or they’re banking on me becoming less disciplined and later using it in ways that do charge fees.
But for how I use it, it’s free. If you use it the same way, that means it’s free for you too.
Cleaner Bank Statements
It has been a long time since I’ve used the envelope system (i.e. putting cash into separate envelopes for different expense categories such as groceries, gas, entertainment, etc). Now, I stick to a spreadsheet and pay for monthly recurring expenses online whenever possible. Cash purchases fall under the miscellaneous daily expenses umbrella, which I don’t really care how it gets spent as long as I stay under budget.
Since it’s already budgeted for as miscellaneous, having a line item for each transaction on my bank statement only makes it harder to track the important transactions. Using Bluebird keeps my bank statements clean by keeping those miscellaneous expenses separate. Transactions are also accessible online and through their app.
Quick Balance Checks
Bluebird’s mobile app has a quick balance check feature when you open the app. Swipe right and it will load your available balance. For me, it’s the new equivalent of seeing how much cash is in my wallet. Before I buy something, I just do a quick check to see where I’m at for the month.
Automated Monthly Transfers
Adding funds to a Bluebird account via an external bank account is a little confusing. You can’t link an external account within Bluebird — instead, you need to link Bluebird to your bank (or credit union) account and initiate the transfer there.
With online banking at my credit union, I was able to schedule a monthly transfer equal to the amount of cash I used to withdraw every month.
There are a couple things I’ve experienced with Bluebird that are annoying. I can and have decided to live with them, but you should know in case they’re deal-breakers.
All Swipe, No Chip
At least at the time of this writing, Bluebird’s prepaid debit cards don’t have chips, so they won’t work with chip readers. You need to swipe the card. I never realized how much I’ve come to rely on chip readers until I couldn’t use them anymore. It usually isn’t a problem, but has been a nuisance more than once.
Difficult & Declined Transactions
The first time I tried to use my card, the transaction got declined. I was hesitant to use it after that point but it hasn’t happened again since. For what it’s worth, I tried to use it to pay for my ticket in a parking garage. It’s entirely possible that the POS system didn’t accept AMEX and had nothing to do with the fact that it’s a prepaid card (I ended up paying with Visa).
I haven’t experienced it myself yet, but the Bluebird website also lists some complications with certain transaction categories. Gas pumps in particular may place a temporary hold on your card larger than the actual purchase amount. They recommend going into the station to avoid this, but for some, that may defeat the purpose of getting the card. Maintaining a $100 minimum balance should avoid this, but you should read through their FAQ to determine if it will work how you need it to.
I Don’t Care If You Get a Bluebird Card
Some of this probably reads like an advertisement, but I honestly don’t care whether or not you get a Bluebird card. They don’t even have an affiliate program, so there’s no incentive for me to promote them. They’ve just made my life easier throughout the pandemic by providing a convenient alternative to cash. I figured they might be helpful for you too.